The stock market started Friday on a good note and it ended Friday on a good note. That bullish tune is still playing in the background, too.
The S&P futures are up two points, the Nasdaq 100 futures are up 10 points, and the Dow Jones Industrial Average futures are up 25 points. Those indications put the major indices on track to open today's session slightly higher.
There hasn't been any change to the catalysts driving the bullish bias, which are rooted in tax reform optimism and momentum-based trading.
Earnings growth has been part of the equation, too, yet it really isn't about third quarter earnings growth.
According to FactSet, the blended earnings growth rate for the third quarter has dropped to 1.7% from 7.5% at the end of the second quarter with 17% of the S&P 500 having reported actual results so far. What market participants are concentrating on is the projected earnings growth rate for the fourth quarter, which is currently 11.4%.
The downshift in third quarter earnings growth has been taken in stride, viewed more as the pause that refreshes than a downshift exposing some excesses.
This week is going to be an extremely busy week of earnings reporting with nearly 200 S&P 500 companies posting their results for the September quarter.
Hasbro (HAS), Halliburton (HAL), Hartford Financial (HIG), V.F. Corp (VFC), and State Street (STT) are among the luminaries that reported this morning and they all topped consensus earnings estimates. Kimberly-Clark (KMB) has not reported as of this post.
The economic calendar is devoid of notable releases today, yet the advance Q3 GDP report awaits at the end of the week.
In the interim, it will be mostly about earnings news, political developments, and the stock market's behavior.
Will the indices continue to push higher or will they succumb to selling interest? That's a question that has applied to Japan's Nikkei 225 as well.
Today, the Nikkei 225 advanced 1.1% on the heels of snap election results for the lower house of parliament that went convincingly in favor of Prime Minister Abe's LDP-led ruling coalition.
That gain marked the 15th straight winning session for the Nikkei, keeping intact a perfect October so far in which it has risen 6.4%. That's just an extension, though, of a rally that launched on September 8. Since then, the Nikkei 225 is up 12.6%!
If one thinks the S&P 500 is overbought on a short-term basis, it's got nothing on the Nikkei.
Anyhow, the Nikkei's outperformance is part of a global rally effort that has pushed up many of the world's major indices. Spain's IBEX 35, which is down 1.8% in October as investors there contend with the disruptive Catalan independence movement, is one of the notable exceptions.
Conversely, the Dow Jones Industrial Average, which is up 4.1% in October, has been a notable standout.
And so we start this week on a familiar plain. The major indices are poised to press higher, as market participants continue to be guided it seems by tax reform optimism and an enthusiasm for the ongoing resilience of the major indices to selling pressure.